Bank of Russia proposes to tax bitcoin as digital commodity

The documents for the taxation of crypto-currencies, including bitcoin, will be ready in a month, says the Russian central bank.

Bitcoin is about to gain some official status in Russia, at least in terms of taxes. According to a report by news information agency RIA Novosti, bitcoin will be taxed as a digital commodity, under proposals outlined by the Bank of Russia.

Olga Skorobogatova, Deputy Governor at the central bank, said the “megaregulator” will present draft legislative documents for the taxation of crypto-currencies, including bitcoin, in a month.

She noted that the topic had been discussed with a number of ministries and institutions, including the Russian Ministry of Finance. The proposal has been backed by all of them, Ms Skorobogatova said.

This statement comes amid growing chatter about the need to regulate crypto-currencies in Russia. In April 2017, Russia’s Deputy Finance Minister Alexey Moiseev said Russia was likely to recognize crypto-currencies as legal in 2018, but soon after that Maxim Grigoriev, Chief of the Centre for Financial Technologies at the Bank of Russia, noted that it was too early to talk of legalization of crypto-currencies in Russia.

Moreover, there are growing concerns about the rising number of financial scams involving bitcoin and other crypto-currencies. Marat Safiulin, who heads the Federal Public-State Foundation for the Protection of Investor and Shareholder Rights, has forecast that the number of such fraudulent schemes will increase further and that oversight of the crypto-currencies trading has to be tightened.

In the meantime, Russian institutions are warming up to blockchain. Russia’s prime minister Dmitry Medvedev has joined the ranks of the supporters of distributed ledger technologies. He has instructed the Ministry of Telecom and Mass Communications and the Ministry of Economic Development to explore the possible applications of blockchain technology in several economic areas. Earlier this month, speaking at the VII St. Petersburg International Legal Forum, Mr Medvedev said that the main moments of regulating blockchain and related distributed ledger technologies (DLT) should be clear by the time blockchain enters in various areas of life. He admitted, however, that blockchain is in its essence an autonomous system.

It’s a love-hate relationship with cryptocurrency. On one hand, it makes it easy for avg citizen to conduct affairs privately without Putin intervention. But on the other hand, Russia can compete with international banking community without having to be blackmailed by SWIFT or Visa/Mastercard